THE EFFECT OF INFLATION ON CONSUMPTION AND SAVING IN NIGERIA:
A CASE STUDY OF OREDO LOCAL GOVERNMENT AREA OF EDO STATE
This study has been designed to investigate the effect of inflation on the economic development of Edo State, a case study of Oredo Local Government Area. The finding of the study revealed some of the problems of the inflation which included persistence and continuous increase in the general level of price and goods and services, economic backwardness in area of saving, investment, development of capital oriented environment social activities, burden of national debt falls since the country, debt in terms of a specified amount of money, continuously lost its value. Recommendation where thereby encouraging that the government should ensure adequate supply of inputs to raise productivity. In the industrial sector of the locality and basic facility like water roads etc should be made available to encourage high increase in manufactured goods. Also there should be expansion in agriculture in the locality as well as Edo State through institutionalized farming, preferably with government participation and appropriate incentives to individual farmers. Provision of storage facilities to regulate the supply of goods.
TABLE OF CONTENTS
1.1 Background to the study
1.2 Statement of problems
1.3 Purpose of study
1.4 Scope of study
1.5 Limitation of study
1.6 Definition of terms
1.7 The significance of study
2.0 Definition/General review
2.1 Types of inflation
2.2 Causes of various types of inflation
2.3 Adverse effects of the various types of inflation
2.4 Inflation in Edo State with special reference to Esan North East Local Government Area
2.5 Effect of inflation in the locality
2.6 Model adopted in controlling inflation
3.1 Research instruments/models
3.2 Sampling of study
3.3 Sampling techniques
3.4 Graphical Illustration of data
3.5 Analysis of data
3.6 Efficiency/deficiency of data
4.0 Presentation and analysis of data
4.1 presentation of analysis
1.1 BACKGROUND OF STUDY
Inflation has been a marked characteristic of most countries since the Second World War, and has therefore continued to receive considerable attention not only from economist but also from operators of the world economy. Between1988 and 1989 inflation rates were54% and 50.4% respectively. This trend was partly due to the massive difficult financing and excessive money supply measures embarked upon by General Ibrahim Babaginda’s administration.
The period 1992- 1995 recorded high rate o9f inflation apart from three reason earlier identified, political uncertainties arising from the annulments of 1993 elections results adversely affected capacity utilization and hence low output of goods and services, resulting in high inflationary trend. Efforts by the present civilian administration to control inflation are yielding positive result as inflation rate declined between 1996 and 2007.
1.2 STATEMENT OF PROBLEM
Insight into problem of inflation is stated or outline as follows.
(a)Persistence and continuous increase into the general level of price of goods and services.
(b)Economic backwardness in areas of savings, investment, development of capital oriented environment, social activities etc
(c) Constant development of currencies which in turn leads to destabilizing the savings habit of the citizens and discouraging lending to long term want for capital projects.
(d) The burden of the national dept falls since the country dept in terms of a specified amount of money continuously loses its value.
(e)Increase balance of payment difficulties since import of consumers goods rise as they become cheaper relative to domestic price of goods which o=in turn discourage export.
(f) Re-distribution of income as workers and peasants becomes poorer where business becomes richer.
(g) Though there is increase in employment of resources especially labour, but the increase and wages are less with time.
1.3 OBJECTIVE OF THEW STUDY
The objective of the study are to identify the effect of inflations on the economic development of Edo state with a case study of Oredo L.G.A and also propound models in solving the problem of inflation to enhance economic development.
This will in general lead to good forecasting and policy formulation with respect to controlling inflation in Oredo and other councils.,
1.4 SCOPE OF THE STUDY
This work is to cover the effects of inflation and economic development in Edo state. With more concentration in Oredo Local Government between 1993 to 2003 (a decade) and also various ways in which the scourge has been controlled by the various administration and relevance of control model or methods.
1.6 DEFINITION OF TERMS
Inflation can be defined as any increase in the money supply; however this can be regarded as inflation. This can also be seen as persistent in average price level of goods and services resulting in diminishing purchasing power of a governmental sum of money. Also when the volume of money in circulation is greater than the available goods and services so that there is a continuous tendency for average price level rise.
1.7 THE SIGNIFICACE OF STUDY
The effect of inflation on the economic development of Edo state cannot be over emphasized; therefore, this research work is designed to find out the problem facing the inflation, problem and prospect in Oredo.
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